Below are answers to some commonly asked questions about charge-off notifications on your credit reports.

What is a charge-off on your credit report?

A charge-off appears on your credit report when a creditor has made all efforts to collect and has been unsuccessful. 

  • A charge-off stays on your report for 7 years 
  • You are still responsible to pay the debt 

Any delinquent account is subject to charge-off after 120 to 180 days of non-payment. The charge off will be reported to the credit reporting agencies and will impact your credit score negatively.

To ensure sure you are not caught off-guard by a chargeoff, we recommend the following:

  • Make sure the credit card companies have your current address to avoid missing notifications
  • Open and respond to any letters that come from your creditors
  • Contact your creditor if you cannot make the minimum payment. They normally are open to making arrangements to help you with the debt and avoid the chargeoff
  • Register for our credit monitoring service, which will give you access to all three credit reports and alert you to any past due balances you may not catch otherwise.  It also provide $1,000,000 ID Theft insurance for you and your family. 

How does a charge-offs turn into collection accounts on your credit report?

The creditor that has charged off the debt will sell your debt to a collection agency.  That collection agency will contact you for payment and if you do not open the mail, email or respond to messages in the first 30 days, a collection account will show up on your credit report, and negatively impact your score. So it is important to open all mail and answer the collector’s phone calls or call them back when they leave you a message.

A creditor cannot garnish your wages without a judgment, which results from a lawsuit.  It is very important not ignore legal notifications and complaints. If you ignore the lawsuit and do not show up in court, the creditor will receive a judgment against you and will have the power to garnish your wages.